A downtown Los Angeles office tower once meant to anchor a post-boxing business empire is now under financial strain after its owner defaulted on tens of millions of dollars in commercial debt.
The property, long associated with Golden Boy Promotions, has been transferred into special servicing following a missed loan maturity, placing a high-profile real estate asset into distress.
The exposure is no longer theoretical. A $27 million commercial mortgage tied to the building has already defaulted, and the gap between the property’s current value and its outstanding debt has widened sharply. Attention has turned not just to the borrower, but to how a prime, long-held office asset became this fragile — and why no earlier safeguard appeared to stop it.
In 2004, Oscar De La Hoya and Golden Boy Promotions acquired a controlling stake in a 12-storey, roughly 150,000-square-foot office building at 626 Wilshire Boulevard for $16 million. At the time, the property was more than 80% leased, centrally located, and positioned as a permanent headquarters for the company’s post-ring ambitions.
The financial risk arrived years later. In 2015, the building was refinanced through a commercial mortgage-backed securities loan when it was appraised at approximately $40 million. The debt structure assumed continued demand for downtown office space and stable long-term tenancy. Those assumptions did not hold.
By 2025, occupancy had fallen to around 60%, reflecting the broader collapse in demand for downtown office space following remote-work adoption and corporate downsizing. A new appraisal that year placed the building’s value at roughly $19 million — less than half its prior peak. When the loan reached its July 2025 maturity date, it was not repaid. The debt was subsequently transferred to special servicing, a formal designation used when loans are in default or at imminent risk.
Golden Boy Promotions remains one of the building’s largest tenants, occupying roughly 10,500 square feet, or about 7% of the total space. But tenancy alone does not resolve the underlying math. The outstanding debt now exceeds the property’s estimated market value, limiting refinancing options and compressing control.
This is not a story about celebrity overspending. It is a case study in how trophy commercial properties — long treated as slow-moving, low-risk assets — can turn into liabilities when market conditions shift faster than debt structures can adjust.
Across major U.S. cities, office buildings financed under pre-pandemic assumptions are approaching maturity in a very different market. Lease demand has weakened, valuations have reset, and lenders are increasingly reluctant to extend capital without concessions. When refinancing fails, exposure becomes immediate.
Responsibility in this case is diffuse. The borrower signed the debt and retains ownership, but the loan was structured, packaged, and sold within the CMBS market under valuation models that proved fragile. Appraisals reflected optimism that lingered well past visible warning signs in the office sector.
Commercial real estate lending is not regulated with the same consumer protections applied to residential mortgages. Oversight relies heavily on market discipline, appraisals, and refinancing assumptions — mechanisms that often fail silently until a maturity date arrives. By the time a loan enters special servicing, the damage is already done.
The unresolved question is not who made a poor bet, but why so many similar bets accumulated without earlier correction. No single institution clearly failed outright, and that fragmentation of accountability is precisely what complicates oversight.
The tension now sits between market flexibility and systemic risk. Commercial real estate depends on leverage and long timelines, but those same features allow vulnerabilities to build quietly. Tightening standards too aggressively risks freezing capital. Leaving them unchanged invites repeated shocks.
What happens next for the Wilshire Boulevard building remains uncertain. Special servicing typically involves negotiations over extensions, restructurings, or asset sales. Foreclosure is possible, but not inevitable. Outcomes will depend on lender tolerance, market liquidity, and whether values stabilise before pressure escalates.
Beyond this single property, scrutiny is widening. Similar office assets in Los Angeles, San Francisco, New York, and Chicago are approaching refinancing deadlines under materially different conditions than when their loans were issued. Each maturity becomes another test of whether the system can absorb losses without wider fallout.
At its core, this default challenges the assumption that prime assets protect against structural change. When long-held properties lose value faster than debt can adapt, control erodes quietly and then all at once.
The broader risk is not confined to one building or one owner. It lies in whether the mechanisms meant to flag danger are capable of acting before exposure becomes public damage. Once trust in those safeguards weakens, restoring it becomes far harder than refinancing a loan.
